Bank warns of difficult 2008 for pubs

28 December 2007 by
Bank warns of difficult 2008 for pubs

An investment bank has warned that a triple whammy of a dip in consumer confidence, growing supermarket alcohol discounting and over-capacity in eating out venues will create a difficult 2008.

JP Morgan told its clients yesterday that pub share values had fallen by an average of 36% during 2007 as the smoking ban and the credit crunch hit. The combination of economic and market conditions had created a "perfect storm" in the sector.

Analyst James Ainley said: "Caution on the consumer, a re-ignition of supermarket discounting and continued eating-out capacity growth all conspire to make us cautious."

Ainley also warned that predictions of steady trading after the smoking ban were "too optimistic" in the light of a downturn in customer spending.

He did offer a chink of light to pure restaurant operators, claiming businesses such as The Restaurant Group were better protected against the "vagaries of the smoking ban".

Christmas eating out spend down, claims new report >>

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By Christopher Walton

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